The marginal revenue curve for a single-price monopoly
A) is horizontal.
B) is upward sloping.
C) lies above the market demand curve.
D) lies below the market demand curve.
D
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Suppose that a monopolist must choose between two points on its demand curve: it can sell 100 units for $3 each, or it can sell 140 units for $2 each. Which of the following is true?
a. The monopolist is facing elastic demand. b. The monopolist is facing unit elastic demand. c. The monopolist is facing inelastic demand. d. The monopolist is facing perfectly elastic demand. e. The elasticity of demand cannot be determined with the information given.
The effects of asymmetric information in the car market can be weakened by:
a. providing a warranty for the product. b. purchasing business interruption insurance. c. inserting a "buyer beware" clause in the agreement. d. buying a "put" option.